Founded 50 years ago, cosmetics firm Nature’s Way has surely come a long way and sells organic products to suit everyone’s needs. CEO and President Yoshiaki Hagiwara, has played a major role in ensuring the success of the organisation and boasts of a leadership style that hinges on transparency.
In a freewheeling chat with Business Frontier, Hagiwara describes how he works to boost employee morale and leverage the uniqueness of company products to stand out in the competition.
Tell us a bit about Nature’s Way and its journey over the years.
Nature’s Way has come a long way since it was founded 50 years ago. We are honoured to celebrate this important landmark in the company’s history, especially keeping in mind that the cosmetics market has low barriers to entry, leading to many players—making it a fiercely competitive business. We have been selling natural organic cosmetics since the company was born. Along the way, we imported tea and handled other products besides cosmetics. However, it is only cosmetics that we now deal with.
Our journey over five decades can be divided into three main parts.
- The first stage was that of relative obscurity. It is only in the last 10 years that natural organic cosmetics have been recognised as a mainstream commercial product in shops in Japan and Asia. Until then, there were no competitors and no large markets. Customers made a purchase decision after we carefully explained our products to them.
- The last decade was a period of significant market growth. The number of competitors increased, and the market grew significantly as cosmetics firms jostled to acquire as many shelves as possible. It was a good time for companies to spend money on advertising, and the more they invested in adverts, the more they grew.
- The market has undergone a major change since COVID-19 began in 2020. During the pandemic, customers stopped visiting shops and in-store promotional material became meaningless. Cosmetics companies began to invest in social networking to appeal directly to customers. Interesting content on social networking sites is now the key to promoting products. Since we use plants to make our products, we can create engaging content telling consumers about the process of transforming plants into raw materials—which other companies cannot.
What is unique about your beauty and wellness products?
We have our own research and development team and production department, allowing us to chronicle the production process of using plants as raw materials. Every step in the production process tells a story — why the ingredients were added, why a specific fragrance was chosen and so on. This is something unique about our products.
We are one of the few cosmetics companies in the world that can produce genuine organic cosmetics and tell our customers how the products are made. This is what makes Nature’s Way stand out.
What is your leadership philosophy and how does it guide the decision-making process within the company?
I have two major roles to play. The first one is decision-making which is completely transparent. The minutes of the management meetings and the opinions I have expressed there are clearly written and shared with all employees. So, there is clarity of my opinion on a certain project and employees do not have to guess what I think.
I believe that for every company it is crucial to have a plan of where it wants to go and what steps should be taken to achieve it. However, employees are too concerned about what the CEO thinks about every step in the process. I work on clarifying this and eliminating any hesitation by staff.
The problem arises when it is observed that my past decisions have been wrong. Since staff can see my previous decisions and opinion, I am always expected to make the right business decisions. I do not hesitate to admit errors in judgement and take a new decision, sharing it with all employees. An organisation cannot grow if it cannot admit faulty decision making. It is more important to take the right action for the future than brood over a mistake made in the past.
Secondly, I strive to create a good working environment for employees as it is they who are responsible for implementing the project. I interview all employees every six months to hear their opinion about the company and their colleagues. There is no better way than this to get an insight into the growth of the company. I am happy when staff is satisfied and they are happy when consumers are satisfied.
What strategies do you employ to foster a culture of innovation and creativity in your team?
Customer feedback is the key to product innovations. In the minutes of our management meetings, we include feedback from our sales staff who have spoken directly to customers. We analyse the reasons for possible customer dissatisfaction and the shortcomings, if any, in our products compared to the competition. I believe that the company has lasted for 50 years because the management team cares about such things. This helps create a culture of innovation and promotes creativity.
How does Nature’s Way keep up with the new trends in the industry?
Fast-changing trends are an essential feature of the cosmetics market. If we misread the trends, we will be unable to sell anything we develop. It is important to develop products that meet demand at the point of development, rather than trying to sell products that are not needed.
We check trends in three main markets every six months. In Europe, we look at Switzerland, Germany, France and the UK. The second is the US market— the world’s largest cosmetics market— where We try to understand the dynamics. And in the Asian market, we look specifically at what new products are being sold and on what terms, especially in China and South Korea.
How do you address sustainability and eco-friendly practices in the beauty and wellness sector?
Nature’s Way embraces sustainability as we are a company that enjoys the bounty of plants and does business involving them. We have been involved in sustainable activities much before sustainability became the buzzword, and we obtained B-CORP certification this year.
Our sustainability activities can be categorised into: company level and product level. At the company level, it is cap-to-cap, where we collect used containers and recycle them into caps, which is probably the easiest example to cite. It is said to be the first such activity in Asia.
At the product level, we consider the sustainability of our raw materials while selecting them. For example, many cosmetics companies generally prefer raw materials that are highly scarce, which is not sustainable. We think and do what we can to ensure that our presence moves both people and the environment in a positive direction.
What trends do you think will rule the cosmetics industry in future?
Cosmetics labels are always in the midst of an advertising battle and it is advertising that is one of the most important determinants in the market. The shift from traditional channels of advertising to social networking is a major trend across the world. In other words, the revolution has shifted from media aimed at the public to information aimed at individuals. In future, information will be transmitted on a one-to-one basis to better suit individual tastes and preferences.
I also believe that consumer love for the product will dominate the industry. Spending on advertising, enhancing AI and intensifying one-on-one transmission will only remain a technical and trendy thing if love for the product does not make customers smile. It is natural that an organisation needs to keep up with the times for the long-term survival of a company or brand, but without the consumer’s liking for the product, it will not last. So, I believe that love for the product is the driving force that will eventually dominate the market, no matter what the times.
